The long-run total cost schedule of a perfectly competitive firm that produces blueberries is as follows:
TABLE 8-2

-Refer to Table 8-2. If input costs are constant and there are no barriers to entry, what will the long-run equilibrium price of a kilogram of blueberries be?

Question

The long-run total cost schedule of a perfectly competitive firm that produces blueberries is as follows:
TABLE 8-2
 
-Refer to Table 8-2. If input costs are constant and there are no barriers to entry, what will the long-run equilibrium price of a kilogram of blueberries be?

Quizplus · Accepted Answer

In a competitive market with constant input costs and no barriers to entry, the long-run equilibrium price will be at the point where price equals the minimum of average total cost (ATC). Without the specific details from Table 8-2, this answer assumes that the minimum ATC is represented by the price closest to $2, as firms will enter and exit the market until price equals the lowest possible ATC to ensure normal profit.

The Long-Run Total Cost Schedule of a Perfectly Competitive Firm